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They're trying to slow the adoption of solar energy through lawmakers

Utility companies around the U.S. fear that solar companies and renewable energy incentives will replace traditional electricity.

According to a report from The New York Times, utility companies view rooftop solar energy as a threat to their traditional business model of providing electricity maintaining the grid.

In fact, some utilities have said that they should've fought the solar "disrupt" and are currently working to push back against government incentives for the renewable energy. 

The utility companies' worries may seem a little ridiculous at present, considering rooftop solar energy alone accounts for less than a quarter of 1 percent of the nation’s power generation. 

However, incentives around the country aim to expand the use of solar power in a big way. For instance, California has a system called net metering, which pays both commercial and residential customers for their excess renewable energy that they sell back to utilities. California pays customers very well through this credit system because the payments are bound to daytime retail rates that customers pay for electricity -- such as utility costs to maintain the grid. 

NYT reports that from 2010 to 2012, the amount of solar installed each year has increased by 160 percent.

At present, 43 states, the District of Columbia and four territories offer incentives for renewable energy in some form or another. 

Solar proponents add that solar customers deserve payment and incentives for their efforts because making more power closer to where it is used (when resold to local utility companies) can alleviate stress on the grid -- making it reliable. It also helps utilities by relieving them from having to build infrastructure and sizable generators. 

However, utility companies feel differently. Their argument is that solar customers, at some point, may stop paying for electricity, which means they also stop paying for the grid. This shifts the costs to other non-solar customers. 

According to California's three major utility companies, they could lose as much as $1.4 billion in annual revenue to solar customers when the state's subsidy program fills up to full capacity. This means that about 7.6 million non-soalr customers would have to make up for that, paying as much as $185 per year each. 

This leads to something utility companies call the "death spiral." This refers to the costs being shifted to non-solar customers, and because of this burden, they switch to solar-powered rooftops -- making utility companies' troubles even worse. 

For that reason, utilities have requested that lawmakers limit those who can participate in such programs, including net metering. 

Some utility companies are adding rooftop solar to their services, such as Dominion in Virginia. But not all are willing to adapt, and while solar still only amounts to a small percentage of power generation in the U.S., it seems utilities are looking to prevent the renewable energy emergence from spreading. 

Source: The New York Times



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It's about preserving an investment
By chunkymonster on 8/1/2013 1:52:17 PM , Rating: 2
Blaming the utility companies for high energy costs is like blaming the grocery store for the high cost of milk.

One thing seemingly missed by many of the posters here is that many utility companies own the infrastructure and have invested BILLIONS of dollars, hundreds of millions of man-hours, and TENS of THOUSANDS of jobs building an infrastructure to provide cheap reliable electricity to their customers. Many utility companies and their shareholders simply expect a return on that investment and continued investment to maintain and upgrade that infrastructure.

Many utility companies are also regulated by State regulatory commissions which dictate that their infrastructure must be regularly updated to ensure reliability and cost effective operations. These same regulatory commissions also limit the Return on Investment utility companies can make from owning and maintaining that infrastructure. These same regulatory commissions also prevent the utility companies from creating subsidiary companies that offer customers alternative energy solutions.

So, while it easy to sit back and complain about the cost of energy and blame the utility companies for it, the utility companies are like any other business that is offering a product and/or service to customers who want it. The real blame lies with the GOVERNMENT and REGULATORY COMMISSIONS who ties the hands of utility companies and prevents them from changing their business models to keep up with changes in the industry as a whole.

Look at America's energy policy. There is no long term national energy policy, at all. Let alone an energy policy that enables existing utility companies and energy providers the flexibility to change with the products and services customers want. All the incentives and tax subsidies have been diverted to tertiary start up companies to create a market for alternative energy. The alternative energy market is being created by government through providing incentives and tax subsidies (paid for by our tax dollars) to force alternative energy into the existing energy marketplace which is effectively creating a false energy market and false energy competition.

Don't get me wrong, alternative energy has a place as part of an overall energy plan. To reduce our reliance on foreign energy sources it is imperative that domestic alternative energy sources be developed and made available to the consumer. However, the alternative energy market needs to happen over time and allowed to develop as a result of consumer demand and driven by market forces. Also, there needs to be legislation necessary for existing utility companies and energy providers to compete with new alternative energy companies that have been created as a result of consumer demand and market forces.




RE: It's about preserving an investment
By bsd228 on 8/1/2013 5:11:06 PM , Rating: 3
quote:
Many utility companies are also regulated by State regulatory commissions which dictate that their infrastructure must be regularly updated to ensure reliability and cost effective operations. These same regulatory commissions also limit the Return on Investment utility companies can make from owning and maintaining that infrastructure. These same regulatory commissions also prevent the utility companies from creating subsidiary companies that offer customers alternative energy solutions.


everyone start playing those 2" violins right now.

PG&E was happy to collect money from rate payers for maintenance, NOT do the maintenance, watch gas line blow up and kill people, and then get the rate payers to pay for the costs of this negligence.

California has seen very little investment in power generation in a long while, which is part of the problem for the state. Given the costs of a new plant, it works out much better for the People (if not Edison or PG&E) to encourage as much solar adoption as possible, as well as funding incentives to remove inefficient appliances from use.


By chunkymonster on 8/2/2013 9:34:44 AM , Rating: 2
I am not apologizing for utility companies, especially one like PG&E, but simply offering a a reminder to the utility company bashers that they are like any other business that has invested in an infrastructure, provides a service, and expects a return on that investment. Contrary to what some people believe, electric and gas is NOT a societal benefit, it is a commodity to be bought and sold between a company and consumer. Also contrary to what some believe, you DO NOT have to purchase electric and gas, you can choose to live without it, people willingly connect to the electric and gas grid because it makes life more convenient. Somehow human beings managed to live and thrive without being connected to the electric and gas grid for HUNDREDS of THOUSANDS of years (prior to the late 1800's) without it.

After the San Bruno explosion, PG&E was found extremely negligent across many facets of their operations from poor GIS data, failure to follow maintenance procedures, and misappropriating funds intended for safety programs. As of July 2013, the penalties still stands at $2.25 Billion and the California PUC has maintained the costs related to the explosion should be paid for by the shareholders and not the rate payers; which is the way it should be.

However, all the PUC is doing here is covering their backside for all the slip-shod regulatory work for not performing the proper due diligence to verify and confirm that PG&E was doing what they were supposed to in the first place. The sole purpose and function of rate payer and tax payer dollars to fund the PUC is for the PUC to determine, confirm, and verify that utility companies are following all state mandated activities and also following their own operational procedures. So, while the San Bruno explosion was an egregious and tragic event, it most likely would have never happened if BOTH the PUC and PG&E had been doing their jobs and following PUC mandated activities and operational procedures.

The fact that California has seen very little power generation can also be taken back to the State government and environmental regulations preventing new generating stations from being built. This is also part and parcel of the complete lack of a Federal energy policy to ensure the legislation is in place that enables utility companies and energy providers from building new coal plants, nuclear plants, gas fired plants, etc.


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